In this month’s edition of the Lewis County Market Report, we’ll consider all the major factors that contribute to a market. Then we’ll analyze the findings and predict what we’ll find in the next market update.
New listings are up nearly 100% from December. However, available homes went down by 8.6%. For reference, in September 2010 there were 1752 units available in Lewis County. Currently, there are 252 units available. It literally has never been lower in history of record keeping which started in 2006. The silver lining here is that inventory levels tend to increase beginning in March and peak in September. Back to last September, there were 481 units available.
Buyer demand is still higher than new listings each month. This is one of the reasons why our inventory supply is decreasing month after month. The system I use for tracking numbers is not working very well, so I can’t provide any historical data at this time. Buyer demand has definitely been higher, but it does fluctuate and there is a clear trend upward over time.
If you had to guess if price was going up or down, which would you choose? Yes, by all categories, it is still going up. I’ve been hounding this point a lot, but each month the market is increasing by at least $2,500. If you were to look at just the monthly increase, from December to January, the average price jumped $17,000. To put this into perspective, if you purchased a home in December for $399,000 – it’s now worth at the end of January $416,000. By not investing into the market and waiting for prices to come down, they just went up 4% in one month. It’s a big mistake to try to time the market.
Interest rates are more devastating to your buying power than any market crash. After many rumors of interest rates increasing, the fed recently stated they were going to raise them three times just this year. This may not have a quick turnaround on buyer demand per se, but it will make things much more expensive even if prices start trending downward. This could in time reduce buyer demand and subsequently ease the massive price increases we are seeing each month. However, because inventory is so low, I do not see prices going down, only the gains being less.
Lewis County Market Report Summary
Most of what you need to know has already been said. Interest rates are going to increase this year. There will probably be a lagging effect on buyer demand, although it could be immediate. Buyers will be able to afford less because their payments will be going up. This in turn, could cause price increases to soften, but not prices themselves as we still have incredibly low inventory.
If you take only one thing from this article, remember this. Starting in March, the fed is looking to increase the interest rate by 1%. If you are approved for a $400,000 loan now, you will only be approved for a $350,000 loan in March.